Quote from risktaker:
Listen to OldTrader because you're really DUMB money.
DUMB money talks the way you're talking when all of a sudden some schmuck luckily rides a bubble wave like that currently in RE.
Just wait until rental vacancies hit you in the ass (I've seen them real BAD) and it takes months to rent anything, your property is totally *screwed* by some loser tenant, or you get your butt hauled into court on some lawsuit or discrimination charge while your *great* investment loses 30% (which more than wipes out your equity) and RE "FOR SALE" signs on every block, THEN you'll UNDERSTAND and won't be talkin' out of your ass as you are now.
OH and 1 more thing...Did I mention RE has NO, NONE, NADA liquidity when it goes into the dump?
So when you realize you're screwed and want OUT, guess what?
So does everybody else and there ain't no DUMB buyers around to save your ass 'cause they're all filing bankruptcies due to losing their jobs and overextending themselves on credit and the banks are pulling in their lines of credit, not writing any more loans and tightening their "standards".
It is *very* different from stocks, especially selling in a bad market.
Well, tell me how you really feel...
I do listen to Old Trader and I have learned some things from reading his posts.
You're rude, but there are others here to may want to know the answers to your questions. So, I'll give them. First of all, home ownership is at an all time high on a percentage basis. That means that renting is at an all time low. We have already hit the low. Its really bad in commercial properties especially right now because everyone is building/has built, instead of renting. It *is* hard to rent my properties out right now, but I'm doing it. FWIW, I've noticed its getting easier since rates have come off the bottom. How do I do it? Some of it has to do with the town I live in, which has two universities and multiple state offices anchoring the economy. Some of it has to do with the fact that I work hard to keep them rented by maximizing curb appeal, focusing on cleanliness, and advertising in multiple forums. If there is ONE person looking for a place to rent, I want to maximize my chances of getting that person in my place. And quite a bit of my success is because I am picky about the locations that I purchase. 95% of my competition has locations that have either a longer commute, or a crappy school zone/area.
Secondly, you paint a scenario where people aren't buying or renting. Pick one or the other, because they don't happen at the same time (unless the coal mine in coaltown closes, but lets not invent situations) I don't care if people aren't buying because I ain't selling. I do care if people aren't renting, but like I said, if anyone is renting, and the renters are making an informed decision, they will pick my properties every time.
Thirdly, liquidity of an investment isn't such a good thing. If you sell everytime you run into trouble, you'll never make money in the long term. Real estate is a *long term* investment that moves in cycles, and the cycles in many of areas in the country away from the coasts (such as mine) are not such roller coaster rides and are more steady. I know enough about investing to know that I don't want to sell at the bottom.
Fourthly, I lock into mortgages, so I am concerned about rents for my revenues. Show me where, and when, rents went down, where property values didn't go up. Really. I'll bet you can't. Like now, rents are lower than normal, but only because people are buying properties, so values are up. Only in bubbles like we're in, will you see rents move down. If you're a landlord and your rents are dropping, you're in a bubble, and you have the option to sell for a profit.
Lastly, I don't discriminate for any color other than green. If people want to rent from me, they have to have a good job and pay their bills and that is all. FWIW, the first tenants I ever had were minorities and they were fantastic. My wife and I have observed first hand that upwardly mobile minorities were our best tenants. I had a young white couple living next to a minority couple who always had a disparaging remark about the minority couples. The irony is that the young white couple suddenly moved out on me with no notice, but the minorities are still there, paying sometimes a week earlier than they have to. And as far as lawsuits, I have a lot of insurance for just such a thing. But I run my rental business like a business. I minimize risk where I can, and most importantly, I treat my tenants with respect. I had a guy twist his ankle on my sidewalk. He was in a cast for a while, and lost his job because he was required to stand. He never considered taking me to court because he thought of me as a nice guy.
Risktaker, you should stay out of rentals. You'll be selling at the bottom, and you'll get sued because you're rude and you've got a bad attitude. Stick to stocks. Renting properties take people skills, and you're lacking in that department.
